New Or Used Construction Equipment - The Return On Investment
Decision
It has always been a debate whether to buy new or used
construction equipment. Smaller fleets prefer to buy used
construction equipment as they attract less capital investments.
Another reason for people to opt for used construction equipment
is that they are sometimes as good as new and come at a very
heavy discounted price as compared to that offered at the
showrooms.
Moreover, Associated Equipment Distributors (AED) and TradeYard,
Inc, have jointly announced an alliance that shall provide
certified inspection of used construction equipment that can
also be sold online. This has been done to boost the
business-to-business sales via online medium. It gives better
promotion to the sale of used construction equipment and buyers
to be confident about their purchase. Usually buyers buy the
used construction equipment only upon the preliminary inspection
done by the technical agent from either the buyer or the seller
side. Since a neutral and unbiased inspection report shall be
available it would lead to increased sales and more profitable
bargains to small investors. Small fleet owners usually opt for
used construction equipment sold from earlier projects. Large
construction companies that carry huge fleet of construction
equipment can also strike a good bargain at onsite purchase of
such certified used construction equipment.
There had always been a skeptical attitude towards the economies
in the Indian sub-continent, Russia or Latin America. But over
the past years these economies have shown a constant and steady
growth. The demand to construct new projects or to renew the old
ones has been always in demand. Since these countries are not as
cash rich and affluent, they usually have constructors who have
smaller fleet. Moreover, they also do not have enough capital to
be invested in developing a large fleet. They are always on a
look out for used construction equipments. Along with this these
constructors take on projects in the neighboring countries and
shifting heavy and used construction equipment is also not
feasible. Thus sales of such equipments is constantly in demand
Apart from the projects in these countries, bigger companies
take up their projects in the continent of Africa and also the
Gulf countries. Thus they opt to buy used construction
equipments available locally from the companies or constructors
who wish dispose off their fleet. The used construction
equipments are also on the sale due to the feasibility reasons
that lie on the seller's side as well. The construction
companies who have finished off their projects in foreign lands
and take up projects in other countries, for such large
companies it is more feasible to dispose off their used
construction equipment and assemble a new fleet at the onsite
location rather than carry them to the new land. This is due to
the reason that various countries have different rules for
export and import of heavy equipment required for infrastructure
development.
Some countries impose heavy taxes and import duties to restrict
import of used construction equipment. This is done to prevent
the domestic markets and small construction companies with
limited resources. Further, export of such used construction
equipment requires various documentation procedure, inspections
and other legal formalities. All such activities are not only
tedious but also time consuming. These formalities also require
lot of duty fulfillment at both the ends. Moreover clearance at
the ports and damage caused in handling and shifiting these
equipments is also very tedious job.
Thus construction companies prefer to buy new or used
construction equipment locally. Only Large construction
companies or companies who have strategic partnerships in the
local market for a company prefer to import a part of their used
construction equipment for their ongoing projects.